Book Chapters:

[1] "Expanding Access to Electricity in Kenya."
Kenneth Lee. 2020. In An Introduction to Development Engineering, eds. Temina Madon and Ashok Gadgil. Springer. Forthcoming.

Abstract: This case study narrates the story behind a research project on the economics of rural electrification in Western Kenya. The chapter covers: (1) aspects of the policy and technology environment that initially guided the course of the work; (2) how the project pivoted away from solar microgrids, focusing instead on the expansion of the national electricity grid; (3) unexpected challenges encountered while implementing a randomized evaluation of electricity infrastructure; (4) interpreting the study findings in light of consequential, concurrent changes to Kenya’s electrification policies; and (5) possible directions for further research, motivated by the project experience.

Working Papers:

[2] "Pollution Masks and The Demand for Clean Air: Experimental Evidence from Delhi"
Patrick Baylis, Michael Greenstone, Kenneth Lee, and Harshil Sahai. 2021.

Abstract: The demand for clean air is a key input in assessing the benefits and costs of air pollution policies, yet there are few estimates of this demand in the world's most polluted cities. We present results from a field experiment designed to estimate the marginal willingness-to-pay (MWTP) for clean air in a representative sample of the urban poor in Delhi, India. Specifically, we estimate the trade-off between pollution exposure and prices revealed by individual decisions to adopt pollution masks. By combining random variation in the price of masks with weekly variation in ambient air pollution, we estimate average MWTP of $0.26 per unit reduction in fine particulate matter (PM2.5), an estimate that is lower than comparable measures from other settings. We find no evidence that demand is meaningfully higher when: (i) we provide information about the health impacts of PM2.5 and (ii) the government rolls out an unprecedented-scale mask distribution campaign. Mean estimates of MWTP, however, mask substantial heterogeneity: our data suggest that demand for clean air is significantly higher for high-income, more-educated, and male individuals. This suggests economic growth may be critical for India to substantially clean its air, over the short and medium-term.

[1] "Money or Power? Financial Infrastructure and Optimal Policy"
Susanna Berkouwer, Pierre Biscaye, Eric Hsu, Oliver Kim, Kenneth Lee, Edward Miguel, and Catherine Wolfram. 2021.

Abstract: In response to the Covid-19 crisis, 186 countries implemented direct cash transfers to house- holds, and 181 introduced in-kind programs that lowered the cost of utilities such as electricity, water, transport, and mobile money. Do cash or in-kind transfers generate greater welfare im- provements? And, does a country’s financial infrastructure affect optimal aid disbursement? Through a parallel set of surveys in two urban regions in Africa—with comparable education, cell phone ownership, and electricity connectivity—we show that optimal government aid dis- bursement hinges on financial infrastructure. In line with economic theory favoring direct cash transfers, in a randomized experiment in Kenya 95% of urban recipients prefer mobile money over electricity transfers of a similar monetary value. But Kenya is an outlier with high mo- bile money adoption: this increases its value and reduces transaction costs of buying electricity credit. By contrast, in Ghana—where mobile money is less widespread and the transaction costs for buying electricity are higher—half of recipients prefer electricity transfers, and many are willing to forego significant value to receive electricity instead of mobile money. These results have several important policy implications. First, the optimal government policy in response to an economic crisis is not uniform: cash and in-kind transfers have different advantages that make each suitable for specific contexts. Second, the adoption of modern financial technologies will likely increase the efficiency of government cash transfer programs, even as in-kind transfers continue to be preferred in settings where mobile money uptake is slow. Finally, giving recipients a choice harnesses valuable local information that a policy maker may not have access to.

Published Articles:

[6] "Indoor Air Quality, Information, and Socio-Economic Status: Evidence from Delhi"
Michael Greenstone, Kenneth Lee, and Harshil Sahai. 2021.

Abstract: Delhi faces some of the world’s highest concentrations of PM2.5, the most damaging form of air pollution. Although awareness of outdoor air pollution is rising across the world, there is limited information on indoor air pollution (IAP) levels, particularly in heavily polluted cities like Delhi. Even less evidence exists on how IAP varies by socio-economic status (SES), and whether or not addressing information gaps can change defensive investments against IAP. In this paper, we deploy Indoor Air Quality Monitors (IAQMs) in thousands of Delhi households across varying socio-economic strata in order to document IAP levels during the peak wintertime air pollution period. Across high and low SES households, we document indoor PM2.5 levels that are: (1) extraordinarily high — more than 20 times World Health Organization (WHO) standards; (2) only 10 percent lower in high (versus low) SES households; and (3) significantly higher than levels reported by the nearest, outdoor government monitors, the main source of public information on air pollution in this setting. We then report on a field experiment that randomly assigned IAQMs, as well as an opportunity to rent an air purifier at a subsidized price, across medium and high SES homes during the 2019-20 winter season.


[5] "Job Loss and Behavioral Change: The Unprecedented Effects of the India Lockdown in Delhi"
Kenneth Lee, Harshil Sahai, Patrick Baylis, and Michael Greenstone. 2020.
Covid Economics 51(7): 134-58 | BFI Working Paper No. 2020-65

Abstract: On March 24, 2020, the Prime Minister of India announced the world's largest COVID-19 lockdown. We summarize the initial impacts of the lockdown for a representative sample of mostly poor and non-migrant workers in Delhi. Using Facebook mobility data, we show that intra-city movement dropped 80 percent following the announcement. Using microeconomic survey data, collected before and during the crisis, we highlight three patterns. First, the lockdown resulted in significant economic costs, with income and days worked falling by 57 and 73 percent, respectively. Second, the lockdown resulted in widespread compliance with public health directives: mask usage rose by 73 percentage points (pp); time spent indoors increased by 51 pp; smoking decreased by 13 pp; and handwashing rose by 10 pp. Third, the economic impacts of the lockdown were somewhat mitigated by government food assistance, which 36 percent of our sample accessed. Over the first seven weeks of the lockdown, we do not observe alarming levels of hunger, scarcity, access to medical care, or security. Yet in our data, concerns remain about mental health, supply chains, and personal savings, against the backdrop of a rising infection rate. Moreover, it remains to be seen whether public health compliance will persist, as the novelty, fear, and media coverage of COVID-19 subside.

Outreach:
Vox Talks [10/20], Hindustan Times [05/20], NDTV [5/20]


[4] "Does Household Electrification Supercharge Economic Development?"
Kenneth Lee, Edward Miguel, and Catherine Wolfram. 2020.
Journal of Economic Perspectives 34(1): 122-44

Abstract: In recent years, electrification has re-emerged as a key priority in low-income countries, with a particular focus on electrifying households. Yet the microeconomic literature examining the impacts of electrifying households on economic development has produced a set of conflicting results. Does household electrification lead to measurable gains in living standards or not? Focusing on grid electrification, we discuss how the divergent conclusions across the literature can be explained by differences in methods, interventions, potential for spillovers, and populations. We then use experimental data from Lee, Miguel, and Wolfram (2019) — a field experiment that connected randomly-selected households to the grid in rural Kenya — to show that impacts can vary even across individuals in neighboring villages. Specifically, we show that households that were willing to pay more for a grid electrification may gain more from electrification compared to households that would only connect for free. We conclude that access to household electrification alone is not enough to drive meaningful gains in development outcomes. Instead, future initiatives may work better if paired with complementary inputs that allow people to do more with power.


[3] "Experimental Evidence on the Economics of Rural Electrification."
Kenneth Lee, Edward Miguel, and Catherine Wolfram. 2020.

Abstract: We present results from an experiment that randomized the expansion of electric grid infrastructure in rural Kenya. Electricity distribution is a canonical example of a natural monopoly. Experimental variation in the number of connections, combined with administrative cost data, reveals considerable scale economies. Randomized price offers indicate that demand for connections falls sharply with price, and is far lower than anticipated by policymakers. Among newly connected households, average electricity consumption is very low, implying low consumer surplus. We do not find meaningful medium-run impacts on economic and non-economic outcomes. We discuss implications for current efforts to increase rural electrification in Kenya, and highlight how various factors may affect interpretation of the results.

Outreach:
VoxDev [07/19], The Economist [02/19], VoxDev [01/19], Oxford Institute for Energy Studies [08/18], Forbes [03/18], The Star (Kenya) [08/16], DEM+ND (ASME Global Development Review) [04/16], Reuters [07/15]




[2] "Appliance Ownership and Aspirations among Electric Grid and Home Solar Households in Rural Kenya."
Kenneth Lee, Edward Miguel, and Catherine Wolfram. 2016.

Abstract: In Sub-Saharan Africa, there are active debates about whether increases in energy access should be driven by investments in electric grid infrastructure or small-scale “home solar” systems (e.g., solar lanterns and solar home systems). We summarize the results of a household electrical appliance survey and describe how households in rural Kenya differ in terms of appliance ownership and aspirations. Our data suggest that home solar is not a substitute for grid power. Furthermore, the environmental advantages of home solar are likely to be relatively small in countries like Kenya, where grid power is primarily derived from non-fossil fuel sources.

Outreach:


[1] "Electrification for "Under Grid" Households in Rural Kenya."
Kenneth Lee, Eric Brewer, Carson Christiano, Francis Meyo, Edward Miguel, Matthew Podolsky, Javier Rosa, and Catherine Wolfram. 2016.

Abstract: In Sub-Saharan Africa, 600 million people live without electricity. Despite ambitions of governments and donors to invest in rural electrification, decisions about how to extend electricity access are being made in the absence of rigorous evidence. Using a novel dataset of 20,000 geo-tagged structures in rural Western Kenya, we provide descriptive evidence that electrification rates remain very low despite significant investments in grid infrastructure. This pattern holds across time and for both poor and relatively well-off households and businesses. We argue that if governments wish to leverage existing infrastructure and economies of scale, subsidies and new approaches to financing connections are necessary.


Outreach:
Stories - Quartz [01/17], Foreign Affairs [08/16], NPR "All Things Considered" [07/15], ClimateWire [07/15], GSMA [07/15], Blum Center for Developing Economies [10/14], GSMA [09/14], USAID FIRM [08/14], Energy Institute at Haas [08/14], Center for Global Development [07/14]